I'm getting closer, tried this:
<telerik:RadWindow.HeaderTemplate>
<DataTemplate>
<Border Background="Green">
<TextBlock Text="Select Email Folders" HorizontalAlignment="Stretch" VerticalAlignment="Stretch"/>
</Border>
</DataTemplate>
</telerik:RadWindow.HeaderTemplate>
I am using green just so I can see it easier in the designer, but it only covers there the text is, not the entire header width or the window border.